Special Section: Ongoing coverage of Gov. Scott Walker's controversial budget-repair bill and the battle over the 2011-'13 state budget

Madison — Who will blink first?

Neither side is budging in Wisconsin's epic fight over union rights, but at some point the dispute must come to a head. And Tuesday could prove to be a crucial day.

Gov. Scott Walker says that is the deadline for his budget-repair bill to pass because it includes a $165 million bond restructuring needed to shore up problems in the fiscal year that ends June 30. Tuesday is also the day Walker will deliver his two-year budget - one that will cut aid to schools and local governments by more than $1 billion, he said Sunday in television appearances.

Senate Minority Leader Mark Miller (D-Monona) has questioned the accuracy of Tuesday's deadline, but Walker has said he will have to lay off 1,500 state workers - and more later - if the bill doesn't pass soon.

Miller and his fellow Senate Democrats left the state Feb. 17 to prevent passage of the budget-repair bill, and they have given no indication of when they will return.

"I think the end game became very complicated when the Democrats left the state," said Charles Franklin, a University of Wisconsin-Madison political scientist.

The move by senators was successful in the short term, Franklin said. But since neither side is receding from its position, Democrats will have difficulty in finding a reason to return, he said.

Walker's bill would fill a $137 million hole in the current fiscal year; require public workers to pay more for their pensions and health care; eliminate the ability of public employee unions to bargain collectively over anything but wages; and give Walker's administration broad powers to reshape state health care programs.

Republicans control the Senate 19-14, but 20 senators must be present to pass spending bills such as the budget-repair bill. The bill passed the Assembly 51-17 on Friday, but can't get through the Senate until at least one Democrat returns.

None have offered hints on when that might happen. Asked Sunday when he would return, Sen. Chris Larson (D-Milwaukee) replied, "Good question."

He spoke by phone after issuing a news release that listed him as attending a UW-Milwaukee forum Monday about a bill to require people to show photo ID to vote.

"As you can probably guess, I will not be there" in person, Larson said. He might participate by phone or over the Web.

Senators may feel pressure from the public to return on a number of fronts. One example: Sens. Lena Taylor and Tim Carpenter, both Milwaukee Democrats, are members of the Milwaukee Metropolitan Sewerage District's 11-member commission, which is scheduled to meet Monday.

When Walker first released his budget-repair bill, his administration said it had to be passed by last Friday. The administration later said lawmakers had until Saturday, and Walker has now settled on Tuesday as the deadline.

An exact deadline isn't clear, but a Feb. 22 memo from the nonpartisan Legislative Fiscal Bureau suggests it is around Tuesday.

That memo says one firm deadline comes March 16 because of requirements to transfer funds within the state budget under current law. But it also says two weeks before then the administration needs to create an official statement for the bond issue, secure an opinion from bond counsel, get a bond rating from independent agencies and take bids for issuing the bonds.

This Wednesday is exactly two weeks from the March 16 deadline.

Walker's plan would delay a $165 million debt payment that is due May 1 and instead spread the payment over 10 years. The measure will increase interest payments by $14 million total over the next two years.

Similar bond restructurings have been used by elected officials from both parties in the last decade to help shore up the state budget.

On the campaign trail, Walker railed against using tricks to balance budgets. Walker spokesman Cullen Werwie said the restructuring was not a gimmick and that the money that was being freed up could be put toward outstanding obligations, such as a $58 million payment Wisconsin owes Minnesota under a scrapped tax-reciprocity deal.

In a phone interview from Illinois on Friday, Miller said Walker's administration could start paperwork for issuing the bonds now, even though the bill hasn't passed. "There's not a real deadline," Miller said.

Walker has threatened to issue layoff notices if the bill doesn't pass soon. That would start with 1,500 state employees and could escalate to 12,000 state, local and school employees, he has said.

He also told Gousha it is essential to pass his budget-repair bill because it will give local governments and schools the ability to find savings so they can withstand the cuts he will announce Tuesday when he proposes his 2011-'13 budget. Those cuts will total more than $1 billion over two years, "most of which is in the schools," Walker said.

Gousha asked what the impact of the budget cuts would be on governmental bodies that already have agreements in place for the coming fiscal year that don't include the concessions. Milwaukee Public Schools has a four-year contract with its teachers that doesn't expire until 2013. The agreement was ratified last year before Walker came into office.

"It's the reason why we put the warning signs out early on," Walker said.

He recommended that entities with existing contracts seek to reopen and modify the agreements with their employee unions to get concessions that could avoid layoffs.

But according to an analysis of the governor's budget-repair bill by the Wisconsin Association of School Boards, the provisions that strip most public workers of their bargaining rights go into effect when an existing collective bargaining agreement expires or is extended, modified or renewed. That might make local unions reluctant to reopen agreements, regardless of the possibility of layoffs.

Education groups have warned their members that the governor's budget could include as much as a $900 million reduction in general school aid, which is the largest pool of money distributed by the state for K-12 education. They also have said the governor could recommend a decrease in state-imposed revenue caps of up to $500 per child.

Gousha asked Walker if the $900 million number was true.

"Yeah," Walker said. "Overall, there will be over a billion dollars cut when it comes to schools, local governments across the board."

The budget-repair bill would require most state, local and school employees to pay half their pension costs - 5.8% of pay for state workers - and at least 12% of their health care costs. It also would take away most collective bargaining rights for all public workers except police, firefighters and state troopers.

Specifically, they would be able to bargain over wages only, but their raises would be capped at the rate of inflation unless a higher increase was approved in a voter referendum. Public employees could not be forced to make payments to unions, as they currently are, and unions would have to hold annual elections to keep their organizations intact.

Public workers have filled the Capitol for two weeks to protest, saying they could accept the financial concessions but not the loss of the bulk of their collective bargaining rights. Walker questioned their sincerity on accepting concessions in his appearances on Gousha's show and on NBC's "Meet the Press" because unions have rushed to get local contracts approved before the bill becomes law.

"We've seen union local after union local . . . rush through contracts that had no pension contributions," Walker said on "Meet the Press."

But union locals simply are following the state's current law, said Rick Badger, executive director of the American Federation of State, County and Municipal Employees Council 40. Badger's group represents local government workers around the state, and he said his members are committed to the concessions.

"If the governor would sit down with us, we could resolve all this," he said.

Amy Hetzner and Don Behm of the Journal Sentinel staff contributed to this report.

About Patrick Marley

Patrick Marley covers state government and state politics. He is the author, with Journal Sentinel reporter Jason Stein, of "More Than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin.”